Review on Studies of Bsc

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Review on Studies of BSC
Yang Liang
Department of Humanities and Economic Management China University of Geosciences Beijing, PRC 100083

Yan Wang
Department of accounting and finance Napier University Edinburgh UK Eh105lw

Because of the weakness of the traditional performance measurements, the Balanced Scorecard (BSC) has become one of the most known and most studied models. This thesis introduced the studies on BSC from foreign scholars, about its signification, criticisms and so on. Keywords: BSC, performance measurements, criticisms

1. weakness of the traditional performance measurements,
Traditional management accounting control systems have been used to monitor and maintain organizational control during many decades [1] . However, with the global environment changing during the 1980s, it is clear to appear the weaknesses of traditional performance measurements. Traditional accounting profit always base on measures such as ROI, ROCE and so on. These measures are mainly criticized because they are mostly based on financial measures, what induce a short term view resulting in a lack of strategic focus; and which are historically focused, while managers require indicators that will predict the future. Moreover, managers’ decisions will be exclusively focused on cost reduction, ignoring customer needs and competitors performance [2] . Due to above weakness of the traditional performance measurements, the new performance measurements linking non-financial measures were developed during the 1980s and 1990s. The new performance measurements as followed [3] : The Balanced Scorecard from Kaplan and Norton in 1992; The Performance Pyramid from Lynch and Cross in 1990; The Results and Determinants Matrix from Fritzerald in 1991; The Framework for Integrated Dynamic PM from Ghalayiniin 1997; The Integrated PM System Methodology from Bititcy in 1997; The Cambridge PM Process from Neely in 1996; The Integrated Measurement Model from Oliver and Palmer in 1998; The Consistent PM System from Flapper in 1996; The Framework for Small Business PM from Laitinen in 1996; During the last decade, the Balanced Scorecard (BSC) has become one of the most known and most studied models, principally owing to the great publicity that has received [4] . The great amount of literature presents many case studies and examples that could be taken as a guide for the implementation of this model and also benefits that could be achieved from it. At this point, this thesis summarized their studies on BSC, including its signification, criticisms and so on.

2. What is Balanced Scorecard (BSC)
Balanced Scorecard was first presented to the public in 1992 by Kaplan and Norton in Harvard Business Review and refined in later publications [5] . The research was based on a study of 12 companies that lasted for a year. The main objective of the BSC is to provide the management of the company with precise information about the critical success factors that will allow a better understanding of the business and a more efficient and faster decision making [6] . The BSC encourages managers to look at the business from four perspectives: customer perspective, internal perspective, financial perspective and innovation and learning perspective -1-

When asked to describe how the Balanced Scorecard helped them achieve breakthrough performance, executives of adopting organizations continually referred to two words: alignment and focus [7] . Although different organizations achieved strategic alignment and focus in different ways, they always use a common set of five principles: Principle 1: Translate the Strategy into Operational Terms Principle2: Align the Organization to the Strategy Principle 3: Make Strategy Everyone's Everyday Job Principle 4: Make Strategy a Continual Process Principle 5: Mobilize Change through Top Leadership Following is the strategy map which can...
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